Tag Archives: Business model

September 17, 2013 · 10:13 am

Our Own Private Idahos

Happy TunesDay!  For our musical subject today, let’s listen to the B52’s.  It’s OK to get up and dance – I’ll wait:

I got to thinking about that phrase and our own private Idaho‘s the other day.  On one level it’s about someone who is wrapped up in their own narrow frame of reference.  They create their own little world and exclude anything outside of its borders.  Maybe that thinking was what inspired yesterday’s post on TV and social.  I do know that it was a bit of synchronicity (not the song!) when I came across an article in the NY Times magazine about popularity that made the point about the continuing segmentation of culture very well.

The piece, entitled What It Means to Be Popular (When Everything Is Popular) sums it up well:

This refraction of the culture into ever-smaller slivers leaves us instinctively with a sense of something lost. Once we listened to the same song together, watched the same show together, argued over the same movies together. Now we’re each focused on our own screen, listening to our own playlist, we’re bowling alone, etc. A landscape that once featured a few unavoidable monoliths of popularity is now dotted with a multitude of lesser monuments, too many to keep track of, let alone celebrate.

I think this creates opportunities for those of us in business along with the obvious difficulties, the ability to scale being the largest problem.   Perhaps we need to be thinking about deep engagement in a series of micro-audiences as opposed to the mass reach everyone seems to desire?  Rather than thinking about going viral (which to me is top-down thinking), maybe we should recognize that there are too many different Idaho’s for that to occur with any regularity and focus instead in creating something for several of them which each of them can serve within their own borders (bottom-up).

When I was a kid there were three television networks and the roster of programs was pretty limited.  The lowest rated shows then would be huge hits now.  That’s not a function of their quality, it’s just that there weren’t any other choices.  Today’s choices are unlimited. “Popular” means someone – anyone – is paying attention.  We need to run our businesses around that definition of popular and build a business model that works, throwing away “old” models in the process.

You with me?

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March 11, 2013 · 10:00 am

The CW

You might have read this morning that the online betting site InTrade is shutting down.

Intrade $ predictions - Nov 3

(Photo credit: New England Secession)

Unlike many of the gambling sites with which you might be familiar, InTrade lets users place wagers on non-sports-related upcoming events.  It was a lot of fun to read the site during the election season because you could see the odds of various candidates’ success changing with each news cycle.  You can read about why the business is shutting down here or here.  We can debate if it’s for legitimate concerns or just because it seemed to be operating outside of the long arm of the law but that’s not really my topic this morning.

What interests me about this site is that it was sometimes criticized for “getting it wrong”, as if the odds it offered were some kind of prediction.  That’s as off-base as thinking that a Las Vegas betting line is a prediction of the outcome.  Neither of those things are true.  InTrade’s odds simply reflected the conventional wisdom – how people saw the outcome and were betting.  It was not any sort of analysis of polling and other data to make predictions.  The Vegas line is similar.  It’s not a prediction – it’s an inducement.  It reflects how the conventional wisdom perceives the event’s outcome and is there to induce an equal number of people to bet on either side.  That’s why the odds change and the line changes.

We do the same thing in business a lot of the time and it’s often to our detriment.  We don’t “bet” on the outcome because we often confuse it with the conventional wisdom.  It’s the old expression about no one ever getting fired for buying IBM or ATT back when those services were the “go to” providers.  We see it today in media plans – start with TV and see whats left.  Even in digital we see it with the “buy Facebook” thinking I run into all the time.  “Winning” in my mind means trying new things all the time, measuring them with data, and not worrying a whole lot if the outcomes defy the conventional wisdom.  After all, it’s easy to get lost in a herd (or to get trampled).

What do you think?

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February 21, 2013 · 11:13 am

Is Facebook Viable?

There’s been a lot written since Facebook did their IPO a while back questioning their business model.

Image representing Facebook as depicted in Cru...

Image via CrunchBase

Some analysts say that once the company solves monetization of the mobile traffic all will be well. Others speculate that a better, more marketer-friendly platform is needed. Personally, I like to let the companies themselves identify where the problems may lie. Facebook did exactly that in their S-1 filing a year ago as they prepared to go public:

If we fail to retain existing users or add new users, or if our users decrease their level of engagement with Facebook, our revenue, financial results, and business may be significantly harmed.

Fair enough.   After all, without users continuing to add content, what’s there?  Which is why a couple of things I’ve read lately have me wondering if Facebook is a viable business in the long-term.  I know – it’s huge, it takes in a lot of money, and it seems sort of ubiquitous.  At one time, many of those things were said about MySpace or the walled-garden version of AOL, so bear with me.

A decent amount (low double digits at one point) of Facebook’s revenue came from Zynga‘s games.  Is anyone you know still “Villing”?  That goes to the engagement point.  More important than that (since revenue sources are fungible), is the fact that younger people don’t seem to be using the service.  In fact, the real young crowd – those reaching the age when they would normally join Facebook – seem to be focused on other services.  Instagram and Tumblr, by many accounts, are more popular with the young teen set than Facebook is, and that’s been the case for a year.

A Pew study came out the other day that should set off te fire alarms at Facebook HQ.  What it found was:

  • 61% of current Facebook users say that at one time or another in the past they have voluntarily taken a break from using Facebook for a period of several weeks or more.
  • 20% of the online adults who do not currently use Facebook say they once used the site but no longer do so.
  • 8% of online adults who do not currently use Facebook are interested in becoming Facebook users in the future.

They asked the 61% of Facebook users who have taken a break from using the site why they did so, and they mentioned a variety of reasons. The largest group (21%) said that their “Facebook vacation” was a result of being too busy with other demands or not having time to spend on the site. Others pointed toward a general lack of interest in the site itself (10% mentioned this in one way or another), an absence of compelling content (10%), excessive gossip or “drama” from their friends (9%), or concerns that they were spending too much time on the site and needed to take a break (8%).  Many of those reasons are NOT things Facebook can fix since they’re a result of what users are doing and not the platform.  That’s troubling.

So I’ll put it out there:  is Facebook a viable business in the long-term?  If it’s just old folks like me catching up with high school pals we haven’t seen in 40 years or our grandkids, is it going to be long before all we see are supplemental Medicaid insurance ads and sponsored posts for hearing aids?  What do you think?  Have you taken a break from Facebook?  Have your kids?  Is Facebook viable in the long-term?

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